UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) September 11, 1998 (August 26,
1998)
NOXSO CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 000-17454 54-1118334
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
2414 Lytle Road
Bethel Park, PA 15102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 854-1200
<PAGE>
Item 3. Bankruptcy and Reorganization.
Confirmation of First Amended Plan of Reorganization
At a hearing on August 26, 1998, the United States Bankruptcy Court for
the Eastern District of Tennessee (the "Bankruptcy Court") confirmed the First
Amended Plan of Reorganization (as modified, the "Plan") of NOXSO Corporation
("NOXSO"). The Bankruptcy Court entered its Order confirming the Plan on
September 2, 1998. The confirmation of the Plan represents a major step in
NOXSO's efforts to reorganize under Chapter 11 of the U.S.
Bankruptcy Code.
Pursuant to the Plan, the remaining principal elements of NOXSO's efforts
to emerge from bankruptcy are (1) to raise $15-18 million in additional equity
financing to construct a commercial-size demonstration of the NOXSO Process, and
(2) to obtain the consent of the U.S. Department of Energy ("DOE") to utilize
DOE cost-sharing funds at the new demonstration project. These elements are
conditions precedent to NOXSO's ability to consummate the Plan and make the
distributions to creditors and shareholders contemplated by the Plan. Other
conditions precedent to the consummation of the Plan include the approval by the
Bankruptcy Court of any host site agreement for a demonstration project that
NOXSO may enter into and the receipt of certain funds from the DOE for prior
projects, as set forth below. The Plan contemplates that the Debtor will
continue its business operations following confirmation and consummation of the
Plan.
Pursuant to a cooperative agreement between DOE and NOXSO (the "Cooperative
Agreement"), the DOE agreed to provide one-half of the allowable cost of
previous NOXSO projects in Indiana and Tennessee. To date, NOXSO has submitted
invoices totaling $2,376,695, which remain unpaid. NOXSO will be submitting
additional invoices to the DOE for its share of costs incurred prior to the date
of consummation of the Plan. Those additional invoices are expected to total
approximately $1,760,000. (Together, the invoices already submitted and those to
be submitted will be referred to as the "DOE Invoices").
If the Plan is not consummated, the DOE position is that none of the DOE
Invoices are payable based on a Cooperative Agreement provision which caps the
DOE liability. Similarly, NOXSO reserves the right to take the position that the
DOE Invoices are payable whether or not the Plan is consummated.
The totals in the DOE Invoices include legal fees and expenses totaling
approximately $650,000. NOXSO and DOE are engaged in discussions concerning
whether all or a portion of those legal fees and expenses are an appropriate
component of the DOE Cost Share. Depending upon the outcome of those
discussions, it is anticipated that, as part of the Amendment to the Cooperative
Agreement, the DOE will pay the DOE Invoices in an amount ranging between
approximately $3,500,000 and $4,150,000. The funds received from the DOE
pursuant to the DOE Invoices constitute the Available Cash and will be all that
is needed to effect the funding necessary to carry out the provisions of the
Plan.
<PAGE>
Depending upon the outcome of NOXSO's objections to several claims and upon
satisfaction of certain conditions, the range of allowed general unsecured
claims will be between approximately $2,600,000 and $3,100,000. If funds are
received from DOE as described above, after payment of secured and priority
claims, approximately $3,100,000 of Available Cash will remain for payment of
allowed general unsecured claims.
The DOE has filed a proof of claim for an amount in excess of $15,000,000.
If NOXSO obtains the necessary third party funding for the demonstration project
and the DOE agrees to the Amendment to the Cooperative Agreement, it is expected
that (i) DOE will agree to a repayment agreement which would allow DOE to waive
its claim as a general unsecured claim and to provide for repayment of the DOE
Cost Share out of future revenues, and (ii) DOE will provide the Available Cash
for the implementation of the Plan.
NOXSO is attempting to obtain new equity funding (the "New Equity Funding")
on the best available terms in exchange for equity in Reorganized NOXSO.
Currently, there are approximately 4,500 holders of NOXSO Common Stock, which
hold approximately 15,400,000 shares of NOXSO Common Stock. It cannot be
determined how much equity will be available for current NOXSO shareholders (the
"Remaining Equity") after the New Equity Funding is obtained. Under the Plan,
NOXSO Common Stock will be extinguished and shareholders will receive their
Pro-rata Share of the Remaining Equity, if any. "Pro-rata Share" means the ratio
of (i) the number of shares of NOXSO Common Stock held by a specific shareholder
to (ii) the total number of shares of outstanding NOXSO Common Stock.
Holders ("Option Holders") of options and warrants of NOXSO ("Existing
Options") will receive options to purchase shares in the Reorganized NOXSO (the
"New Options") on the following basis:
(a) the number of shares subject to the Existing Options held by each
specific Option Holder will be reduced by the same percentage that the
shareholders' interests in Reorganized NOXSO are reduced as a result
of the New Equity Funding.
(b) the exercise price for each New Option will be the same as the
exercise price for the Existing Options, subject to an increase or
decrease in the exercise price to reflect the value of shares of
Reorganized NOXSO on the Distribution Date as a result of the New
Equity Funding (the "New Exercise Price") compared to the average
value of the individual shares of NOXSO computed by averaging the
closing price for NOXSO Common Shares for the six (6) month period
immediately preceding the Confirmation Date (the "Current Price").
<PAGE>
Item 7. Financial Statements and Exhibits.
(c) Exhibits
2.1 First Amended Plan of Reorganization of NOXSO Corporation, as modified.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NOXSO CORPORATION
/s/ Edwin J. Kilpela
---------------------------
Edwin J. Kilpela
President
Date: September 11, 1998
Bethel Park, Pennsylvania
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF TENNESSEE
CHATTANOOGA DIVISION
- ------------------------------------
IN RE: ) Chapter 11
)
NOXSO CORPORATION, ) Case No. 97-10709
)
Debtor. ) Judge R. Thomas Stinnett
- ------------------------------------)
DEBTOR'S PLAN OF REORGANIZATION
DOEPKEN KEEVICAN & WEISS
Joel M. Walker, Esquire
Philip J. Uher, Esquire
58th Floor, USX Tower
600 Grant Street
Pittsburgh, PA 15219
(412) 355-2600
[STAMP] -and-
98 JUN 16 PM 1:21
WEEMS AND HOUSE
CLERK Kyle R. Weems, Esquire
U.S. BANKRUPTCY CT. TN Id. No. 1010
CHATTANOOGA, TN Weems & House
1810 McCallie Avenue
Chattanooga, TN 37404
(423) 624-1000
Attorneys for Noxso Corporation,
Debtor-in-Possession
Dated: Pittsburgh, Pennsylvania
June 15, 1998
<PAGE>
INTRODUCTION
Noxso Corporation ("Noxso" or "Debtor") hereby proposes the following plan
of reorganization ("Plan") for the resolution of the Debtor's outstanding
creditor claims and equity interests. Reference is made to the Disclosure
Statement (as that term is defined herein), distributed contemporaneously
herewith, for a discussion of the Debtor's history, business, property, and
operations, a summary and analysis of the Plan, and certain related matters. The
Debtor is the proponent of this Plan within the meaning of section 1129 of the
Bankruptcy Code (as that term is defined herein). Subject to certain
restrictions and requirements set forth in section 1127 of the Bankruptcy Code
and Fed.R.Bankr.P. 3019, the Debtor reserves the right to alter, amend, modify,
revoke or withdraw this Plan prior to its substantial consummation.
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME
A. Scope of Definitions; Rules of Construction
For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined shall
have the meanings ascribed to them in Article I of this Plan. Any term used in
this Plan that is not defined herein, but is defined in the Bankruptcy Code or
in the Bankruptcy Rules, shall have the meaning ascribed to that term in the
Bankruptcy Code or the Bankruptcy Rules. Whenever the context requires, such
terms shall include the plural as well as the singular number, the masculine
gender shall include the feminine, and vice versa.
B. Definitions
1.01. "Administrative Claim" means a Claim for payment of an administrative
expense of a kind specified in section 503(b) or 1114(e)(2) of the Bankruptcy
Code and entitled to priority pursuant to section 507(a)(1) of the Bankruptcy
Code, including, but not limited to, (a) the actual, necessary costs and
expenses, incurred after the Petition Date, of preserving the Estate and
operating the business of the Debtor, including wages, salaries, or commissions
for services rendered after the commencement of the Case, (b) Professional Fees,
(c) all fees and charges assessed against the Estate under chapter 123 of title
28, United States Code, and (d) all Allowed Claims that are entitled to be
treated as Administrative Claims pursuant to a Final Order of the Bankruptcy
Court.
1.02. "Alcoa" means Alcoa Generating Corporation and Alcoa Corporation.
1.03. "Allowed Claim" means a Claim or any portion thereof (a) that has
been allowed by a Final Order, (b) that either (x) has been Scheduled as a
liquidated, non-contingent,
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undisputed Claim in an amount greater than zero in any of the Debtor's
Schedules, as the same may from time to time be amended in accordance with the
Bankruptcy Code, Bankruptcy Rules, or orders of the Bankruptcy Court or (y) is
the subject of a timely filed proof of claim as to which either (i) no objection
to its allowance has been filed (either by way of objection or amendment to the
Schedules) within the periods of limitation fixed by the Bankruptcy Code or by
any order of the Bankruptcy Court or (ii) any objection to its allowance has
been settled, waived through payment, or withdrawn, or has been denied by a
Final Order, or (c) that is expressly allowed in a liquidated amount in the
Plan; provided, however, that with respect to an Administrative Claim, "Allowed
Claim" means an Administrative Claim as to which a timely request for payment
has been made in accordance with Article XI.A of this Plan (if such written
request is required) or other Administrative Claim, in each case as to which the
Debtor (1) has not interposed a timely objection or (2) have interposed a timely
objection and such objection has been settled, waived through payment, or
withdrawn, or has been denied by a Final Order.
1.04. "Allowed Class ... Claim" means an Allowed Claim in the particular
Class described.
1.05. "Amendment to the Cooperative Agreement" means the amendment to the
Cooperative Agreement which has been requested by Noxso, as described in Section
II.B.2 of the Disclosure Statement.
1.06. "Available Cash" means the Cash to be collected from the DOE pursuant
to the DOE Invoices as more fully described in Article III herein.
1.07. "Ballots" means each of the ballot forms distributed with the
Disclosure Statement to holders of Impaired Claims entitled to vote under
Article II hereof in connection with the solicitation of acceptances of the
Plan.
1.08. "Bankruptcy Code" means title 11 of the United States Code, 11 U.S.C.
ss.ss. 101- 1330, as in effect on the date hereof.
1.09. "Bankruptcy Court" means the United States Bankruptcy Court for the
Eastern District of Tennessee, Chattanooga Division.
1.10. "Bankruptcy Rules" means, collectively, the Federal Rules of
Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, the Federal
Rules of Civil Procedure, as amended, as applicable to the Case or proceedings
therein, and the Local Rules of the Bankruptcy Court, as applicable to the Case
or proceedings therein, as the case may be.
1.11. "Case" means the bankruptcy case of the Debtor presently pending at
Case No. 97-10709 in the Bankruptcy Court.
1.12. "Cash" means legal tender of the United States or equivalents
thereof.
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1.13. "Claim" means a claim against the Debtor, whether or not asserted, as
defined in section 101(5) of the Bankruptcy Code.
1.14. "Class" means a category of holders of Claims or Interests, as
described in Article II below.
1.15. "Class 5 Pro-rata Share" means the ratio of (i) the Allowed General
Unsecured Claim of a specific Class 5 Claimant to (ii) the total of all Allowed
General Unsecured Claims.
1.16. "Class 6A Pro-rata Share" means the ratio of (i) the number of shares
of Noxso Common Stock held by a specific Class 6A Holder to (ii) the total
number of shares of Noxso Common Stock.
1.17. "Confirmation" means entry by the Bankruptcy Court of the
Confirmation Order.
1.18. "Confirmation Date" means the date of entry by the Bankruptcy Court
of the Confirmation Order.
1.19. "Confirmation Hearing" means the hearing to consider confirmation of
the Plan under section 1128 of the Bankruptcy Code.
1.20. "Confirmation Order" means the order entered by the Bankruptcy Court
confirming the Plan.
1.21. "Consummation Date" means the date on which all conditions to the
consummation of the Plan set forth in Article VI hereof have been satisfied or
waived as provided in Article VI hereof.
1.22. "Cooperative Agreement" means the Clean Coal Technology Agreement
entered into between the DOE and M-K Ferguson Company in March, 1991, which was
subsequently amended and novated to Noxso and all amendments thereto.
1.23. "Creditors' Committee" means the official committee of unsecured
creditors appointed by the United States Trustee in this Case as constituted
from time to time.
1.24. "Date of Adjudication" means June 4, 1997, the date that Noxso agreed
to the entry of an Order for Relief and converted the Case to chapter 11.
1.25. "Debtor" means Noxso Corporation, debtor and debtor-in-possession in
Case No. 97-10709 pending in the Bankruptcy Court.
1.26. "Demonstration Project" means the project to build and demonstrate
the first commercial-sized installation of the Noxso Process.
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1.27. "Disallowed Claim" means a Claim, or any portion thereof, that (a)
has been disallowed by a Final Order, (b) is Scheduled at zero or as contingent,
disputed, or unliquidated and as to which a proof of claim bar date has been
established but no proof of claim has been filed or deemed timely filed with the
Bankruptcy Court or otherwise deemed timely filed under applicable law, (c) is
not Scheduled and as to which a proof of claim bar date has been established but
no proof of clam has been filed or deemed timely filed with the Bankruptcy Court
pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy
Court or otherwise deemed timely filed under applicable law, or (d) is the
subject of an objection filed by the Debtor with the Bankruptcy Court and which
objection has not been withdrawn or overruled by a Final Order of the Bankruptcy
Court.
1.28. "Disclosure Statement" means the written disclosure statement that
relates to the Plan, as approved by the Bankruptcy Court pursuant to section
1125 of the Bankruptcy Code and Fed.R.Bankr.P. 3017, as such disclosure
statement may be amended, modified, or supplemented from time to time.
1.29. "Disputed Claim" means a Claim, or any portion thereof, that is
neither an Allowed Claim nor a Disallowed Claim, including, but not limited to,
Claims (a)(i) that have not been Scheduled by the Debtor or (ii) have been
Scheduled at zero or as contingent, unliquidated or disputed, (b) that are the
subject of a proof of claim that differs in nature, amount or priority from the
Debtor's Schedules, and (c) the allowance or disallowance of which is not yet
the subject of a Final Order.
1.30. "Disputed Claims Reserve" means the funds attributable to Disputed
Claims on the Consummation Date, which funds shall be held in reserve by
Reorganized Noxso.
1.31. "Distribution Date" means the date, occurring as soon as practicable
after the Consummation Date, upon which distributions from Reorganized Noxso are
made to holders of Allowed Claims and Interests; provided, however, that in no
event shall the Distribution Date occur sooner than five (5) business days or
later than fifteen (15) business days after the Consummation Date.
1.32. "DOE" means the United States Department of Energy.
1.33. "DOE Cost Share" means the funding from the DOE pursuant to the terms
of the Cooperative Agreement.
1.34. "DOE Invoices" means the invoices described in Article III herein.
1.35. "Equity Interest" means a holder of Equity Securities.
1.36. "Equity Securities" means, collectively, the Noxso Common Stock, the
Existing Options, and the Warrants.
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1.37. "Estate" means the estate of Noxso created under section 541 of the
Bankruptcy Code.
1.38. "Existing Options" means the options and warrants to purchase Noxso
Common Stock outstanding as of June 15, 1998.
1.39. "Final Order" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket in the Case, the
operation or effect of which has not been stayed, reversed, or amended and as to
which order or judgment (or any revision, modification, or amendment thereof)
the time to appeal or seek review or rehearing has expired and as to which no
appeal or petition for review or rehearing was filed or, if filed, remains
pending.
1.40. "Gap Claim" means claim that was incurred by the Debtor between the
Petition Date and the Date of Adjudication.
1.41. "Gap Period" means the time period between the Petition Date and the
Date of Adjudication.
1.42. "General Unsecured Claim" means a Claim that is not an Administrative
Claim, Gap Claim, Priority Tax Claim, or Secured Claim.
1.43. "Host Site Agreement" means the agreement entered into by Noxso and
RPL on January 5, 1998, to build the Demonstration Project.
1.44. "Impaired ..." means, when used with reference to a Claim or
Interest, a Claim or Interest that is impaired within the meaning of section
1124 of the Bankruptcy Code.
1.45. "Interest" or "Interests" means (a) the legal, equitable, contractual
and other rights of any Person with respect to the Equity Securities and (b) the
legal, equitable, contractual or other rights of any Person to acquire or
receive any of the foregoing.
1.46. "New Equity" means the equity securities to be issued to the source
of the New Equity Funding.
1.47. "New Equity Funding" means the funds to be provided to the Debtor
pursuant to the agreement or agreements between the Debtor and a third party or
parties in exchange for the New Equity.
1.48. "New Options" mean the options to be issued pursuant to Article
II.B.6.b. of the Plan.
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1.49. "Noxso" means Noxso Corporation, debtor and debtor-in-possession in
Case No. 97-10709 pending in the Bankruptcy Court.
1.50. "Noxso Common Stock" means the existing common stock of Noxso as of
June 15, 1998.
1.51. "Noxso Process" means the process developed by Noxso to remove a high
percentage of the pollutants which cause "acid rain" and ground level ozone from
flue gas generated by burning fossil fuel and the intellectual property
associated with the process.
1.52. "Person" means an individual, corporation, partnership, governmental
unit, joint venture, association, joint stock company, limited liability
company, limited liability partnership, trust, estate, unincorporated
organization, or other entity.
1.53. "Petition Date" means February 6, 1997, the date on which the
involuntary petition was filed against the Debtor.
1.54. "Plan" means this plan of reorganization as such plan may be amended
from time to time in accordance with the Bankruptcy Code and Bankruptcy Rules.
1.55. "Priority Tax Claim" means a Claim that is entitled to priority
pursuant to section 507(a)(8) of the Bankruptcy Code.
1.56. "Professional" means any professional employed in the Case pursuant
to sections 327 or 1103 of the Bankruptcy Code or otherwise and the
professionals seeking compensation or reimbursement of expenses in connection
with the Case pursuant to section 503(b)(4) of the Bankruptcy Code.
1.57. "Professional Fee Claim" means a Claim of a Professional for
compensation for services rendered, and/or reimbursement of costs and expenses
incurred, after the Petition Date and prior to and including the Consummation
Date.
1.58. "Remaining Equity" means the amount of equity available for Class 6
holders after the New Equity is issued to the source of the New Equity Funding.
1.59. "Reorganized Noxso" means Noxso Corporation, a Virginia corporation,
on and after the Consummation Date.
1.60. "RPL" means Richmond Power & Light.
1.61. "Scheduled" means, with respect to any Claim or Interest, the status
and amount, if any, of such Claim or Interest as set forth on the Schedules.
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1.62. "Schedules" means the schedules of assets and liabilities and the
statements of financial affairs filed in the Bankruptcy Court by the Debtor as
such schedules or statements have been or may be further amended or supplemented
from time to time in accordance with Fed.R.Bankr.P. 1009 or orders of the
Bankruptcy Court.
1.63. "Secondary Distribution Date" means the date, occurring as soon as
practical after all Disputed Claims in a specific class become Allowed Claims or
Disallowed Claims, when funds remaining in the disputed Claims reserve, if any,
are distributed to members of the specific class.
1.64. "Secured Claim" means a Claim that is secured by a security interest
or lien upon property, or the proceeds of the sale of such property, in which
the Debtor has an interest, to the extent of the value, as of the Consummation
Date, of such interest or lien as determined by a Final Order of the Bankruptcy
Court pursuant to section 506 of the Bankruptcy Code or as otherwise agreed upon
in writing by the Debtor or Reorganized Noxso and the holder of such Claim.
1.65. "Unimpaired Claim" means a Claim that is not an Impaired Claim.
C. Rules of Interpretation
For purposes of the Plan, (a) any reference in the Plan to an existing
document or exhibit filed or to be filed means such document or exhibit as it
may have been or may be amended, modified, or supplemented, (b) unless otherwise
specified, all references in the Plan to Sections, Articles and Exhibits are
references to Sections, Articles and Exhibits of or to the Plan, (c) the words
"herein" and "hereto" refer to the Plan in its entirety rather than to a
particular portion of the Plan, (d) captions and headings to Articles and
Sections are inserted for convenience of reference only and are not intended to
be a part of or to affect the interpretation of the Plan, and (e) the rules of
construction set forth in section 102 of the Bankruptcy Code and in the
Bankruptcy Rules shall apply.
D. Computation of Time
In computing any period of time prescribed by or allowed by the Plan, the
provisions of Fed.R.Bankr.P. 9006(a) shall apply.
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ARTICLE II.
TREATMENT OF CLAIMS AND INTERESTS
A. Unimpaired Classes of Claims
1. Class 1: Administrative Claims
Except as otherwise provided for herein, and subject to the requirements of
Article XI.A of the Plan, on the Distribution Date or, if an Administrative
Claim is disputed, as soon as reasonably practical after it becomes an Allowed
Administrative Claim, the holder of such Allowed Administrative Claim will
receive in full satisfaction, settlement, and release of and in exchange for
such Allowed Administrative Claim (i) Cash equal to the unpaid portion of such
Allowed Administrative Claim or (ii) such other treatment as to which the Debtor
or Reorganized Noxso and such holder will have agreed upon in writing; provided,
however, that Allowed Administrative Claims with respect to liabilities incurred
by the Debtor in the ordinary course of business during the Case will be paid in
the ordinary course of business in accordance with the terms and conditions of
any agreements relating thereto.
2. Class 2: Gap Claims
On the Distribution Date or, if a Gap Claim is disputed, as soon as
reasonably practical after the date it becomes an Allowed Gap Claim, the holder
of such Allowed Gap Claim will receive in full satisfaction, settlement, and
release of and in exchange for such Allowed Gap Claim (i) Cash equal to the
unpaid portion of such Allowed Gap Claim or (ii) such other treatment as to
which the Debtor or Reorganized Noxso and such holder will have agreed upon in
writing.
3. Class 3: Secured Claims
On the Distribution Date or, if a Secured Claim is disputed, as soon as
reasonably practical after it becomes an Allowed Secured Claim, the holder of
such Allowed Secured Claim will receive in full satisfaction, settlement, and
release of and in exchange for such Allowed Secured Claim (i) Cash equal to the
unpaid portion of such Allowed Secured Claim or (ii) such other treatment as to
which the Debtor or Reorganized Noxso and such holder will have agreed upon in
writing.
4. Class 4: Priority Tax Claims
On the Distribution Date or, if a Priority Tax Claim is disputed, as soon
as reasonably practical after it becomes an Allowed Priority Tax Claim, the
holder of such Allowed Priority Tax Claim will receive in full satisfaction,
settlement, and release of and in exchange for such Allowed Priority Tax Claim
(i) Cash equal to the unpaid portion of such Allowed Priority Tax Claim or (ii)
such other treatment as to which the Debtor or Reorganized Noxso and such holder
will have
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agreed upon in writing; provided, however, that any Claim or demand for payment
of a penalty (other than a penalty of the type specified in section 507(a)(8)(G)
of the Bankruptcy Code) is disallowed under the Plan, and the holder of an
Allowed Priority Tax Claim will not be permitted to assess or attempt to collect
such penalty from the Debtor, its Estate, Reorganized Noxso, or their property.
B. Impaired Classes of Claims
5. Class 5: General Unsecured Claims
Class 5 consists of all General Unsecured Claims that are not classified
elsewhere in the Plan. On the Distribution Date, or if a General Unsecured Claim
is disputed, as soon as reasonably practical after it becomes an Allowed General
Unsecured Claim, the holder of such Allowed General Unsecured Claim will receive
in full satisfaction, settlement, and release of and in exchange for such
Allowed General Unsecured Claim (i) their Class 5 Pro-rata Share of Available
Cash after payment of the Claims of Classes 1, 2, 3, and 4, but in no event more
than the amount of the unpaid portion of such Allowed General Unsecured Claim,
or (ii) such other treatment as to which the Debtor or Reorganized Noxso and
such holder will have agreed upon in writing.
"Class 5 Pro-rata Share" means the ratio of (i) the Allowed General
Unsecured Claim of a specific Class 5 Claim to (ii) the total of all Allowed
General Unsecured Claims. "Available Cash" shall consist of the money collected
from the Department of Energy ("DOE") as more fully described under Article III,
"Means of Implementation of the Plan".
In the event that the Available Cash is not sufficient to pay the Allowed
Unsecured Claims in full, Noxso would intend to pursue preference actions
against certain creditors. Holders of Allowed General Unsecured Claims would
receive their Class 5 Pro-rata Share of any recovery from those preference
actions, but in no event more than the amount of the unpaid portion of such
Allowed General Unsecured Claim.
On the Secondary Distribution Date, the amount, if any, remaining in the
Disputed Claims Reserve on account of the General Unsecured Claims which all
have become Allowed General Unsecured Claims or Disallowed General Unsecured
Claims, shall be distributed on a pro-rata basis to holders of Allowed General
Unsecured Claims.
6. Class 6: Holders of Noxso Equity Securities
a. Class 6A: Holders of Noxso Common Stock
On the Consummation Date, Noxso Common Stock will be extinguished and Class
6A holders will receive their Class 6A Pro-rata Share of the Remaining Equity,
if any. "Class 6A Pro-rata Share" shall mean the ratio of (i) the number of
shares of Noxso Common Stock held by
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a specific Class 6A holder to (ii) the total number of shares of common stock
outstanding as of the Confirmation Date.
From and after the Consummation Date, each holder of a certificate of Noxso
Common Stock shall be entitled to receive in exchange therefor, upon surrender
thereof to Reorganized Noxso, a certificate representing its Class 6A Pro-rata
Share of the Remaining Equity.
b. Class 6B: Holders of Options and Warrants
On the Consummation Date, Class 6B holders will receive options to purchase
shares in Reorganized Noxso (the "New Options") on the following basis:
Class 6B holders will receive options to purchase shares in the Reorganized
Noxso (the "New Options") on the following basis:
(a) the number of shares subject to the Existing Options held by each
specific Class 6B holder will be reduced by the same percentage that
the Class 6A holders' interests in Reorganized Noxso are reduced as a
result of the New Equity Funding.
(b) the exercise price for each New Option will be the same as the
exercise price for the Existing Options, subject to an increase or
decrease in the new exercise price to reflect the value of shares of
Reorganized Noxso on the Distribution Date as a result of the New
Equity Funding compared to the average value of the individual shares
in the Debtor computed by averaging the closing price for Noxso Common
Stock for the six (6) month period immediately preceding the
Confirmation Order.
From and after the Consummation Date, each holder of a writing evidencing
an Existing Option shall be entitled to receive in exchange therefor, upon
surrender thereof to Reorganized Noxso, an equivalent writing representing the
New Options to which it is entitled.
C. Fractional Cents/Fractional Shares
Notwithstanding any other provision of the Plan to the contrary, no payment
or distribution of fractions of cents or fractions of shares of the Remaining
Equity or New Options will be made. Whenever any fraction would otherwise be
called for, the actual payment or distribution shall be made by rounding of such
fraction upward or downward to the nearest whole number.
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D. Claims Under $10,000
If the face amount of a Disputed Claim is less than $10,000, Reorganized
Noxso may settle the Disputed Claim without notice to any party. If the face
amount of the Disputed Claim is more than $10,000, Reorganized Noxso must give
notice of the proposed settlement to the Creditors' Committee. If the Creditors'
Committee objects to the proposed settlement of such a Disputed Claim and does
not withdraw its objection, then Reorganized Noxso must obtain Bankruptcy Court
approval of the proposed settlement.
ARTICLE III.
MEANS FOR IMPLEMENTATION OF PLAN
Pursuant to the Cooperative Agreement, the DOE agreed to provide the DOE
Cost Share comprising one-half of the cost of the Alcoa Project and the
Tennessee Facility (see Section II.A of the Disclosure Statement). To date,
Noxso has submitted invoices totaling $2,376,695, which remain unpaid. Noxso
will be submitting additional invoices to the DOE for its share of costs
incurred prior to the Consummation Date. Those additional invoices are expected
to total approximately $1,760,000. (Together, the invoices already submitted and
those to be submitted will be referred to as the "DOE Invoices".) The total of
the DOE Invoices includes legal fees and expenses totaling approximately
$650,000. Noxso and DOE are engaged in discussions concerning whether all or a
portion of those fees and expenses are an appropriate component of the DOE Cost
Share.
Depending upon the outcome of those discussions, it is anticipated that, as
part of the Amendment to the Cooperative Agreement, the DOE will pay the DOE
Invoices in an amount ranging between approximately $3,500,000 and $4,150,000.
The funds received from the DOE pursuant to the DOE Invoices constitute the
Available Cash and will be all that is needed to effect the funding necessary to
carry out the provisions of the Plan.
ARTICLE IV.
POST-CONFIRMATION ISSUES
A. Continued Corporate Existence
Noxso will continue to exist as Reorganized Noxso after the Consummation
Date and shall continue to operate the business formerly operated by Noxso. The
Debtor or Reorganized Noxso also will make the payments that are required to be
made under the Plan.
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B. Certificate of Incorporation and By-laws
The certificate of incorporation and by-laws of Noxso shall be amended as
necessary to satisfy the provisions of the Plan and the Bankruptcy Code.
C. Management of the Reorganized Debtor
Subsequent to the Confirmation Date, Edwin J. Kilpela will continue as
President and Chief Executive Officer of Reorganized Noxso and John L. Haslbeck
will continue as Vice President and Treasurer. These are the positions that have
been held by these individuals during the Case, and their duties as employees
will continue. Mr. Kilpela is currently employed under an employment agreement
dated as of February 13, 1997. Mr. Haslbeck is presently employed pursuant to
the terms of an employment agreement effective as of April 29, 1992, which had
an initial term of two years and which will continue to govern his employment.
Subsequent to the Confirmation Date, the Board of Directors will consist of
Edwin J. Kilpela, John L. Haslbeck, Robert M. Long, Lewis G. Neal, John R.
Toedtman and Stephen C. Voss. In addition, it is expected that the entities that
provide the New Equity, as part of their agreement to provide the New Equity,
will be entitled to appoint a certain number of directors to the Board of
Directors. Thereafter, board members shall be elected by the shareholders of
Reorganized Noxso and the officers shall be appointed annually by the Board of
Directors. Vacancies in the Board of Directors shall be filled by the Board of
Directors.
D. Rights, Powers and Duties of Reorganized Noxso
Reorganized Noxso shall retain and have all the rights, powers and duties
necessary to carry out its responsibility under the Plan. Such rights, powers
and duties shall include, among others:
(a) investing Reorganized Noxso's Cash in any investments that may be
permissible under (i) ss. 345 of the Bankruptcy Code or (ii) any order of the
Bankruptcy Court entered in the Case;
(b) calculating and paying of all distributions to be made under the Plan
to the holders of Allowed Claims;
(c) employing, supervising, and compensating professionals retained to
represent the interests of and serve on behalf of Reorganized Noxso;
(d) making and filing tax returns for Reorganized Noxso;
(e) objecting to Claims or Interests filed against the Estate;
(f) prosecuting avoidance actions under 11 U.S.C. ss.ss. 544, 545, 547,
548, and 553;
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(g) prosecuting turnover actions under 11 U.S.C.ss.ss.542 and 543;
(h) prosecuting, settling, dismissing or otherwise disposing of all
litigation;
(i) taking any and all other actions necessary or appropriate to implement
or consummate this Plan.
E. Revesting of Assets
Except as otherwise provided in the Plan or Confirmation Order, on the
Confirmation Date, the Debtor shall be vested with full ownership of and
dominion over its property and assets free and clear of all Claims, liens,
charges, and other interests of creditors arising prior to the Petition Date.
Upon the Confirmation Date, the Debtor may operate its business free of any
restrictions of the Bankruptcy Code, the Bankruptcy Court, or the United States
Trustee.
F. Discharge
Except as otherwise provided in the Plan or Confirmation Order, entry of
the Confirmation Order acts as a discharge effective as of the Confirmation Date
of any and all debts of and Claims against the Debtor that arose at any time
before the entry of the Confirmation Order, including but not limited to all
principal and any and all interest accrued thereon, pursuant to ss. 1141(d)(1)
of the Bankruptcy Code. The discharge of the Debtor shall be effective as to
each Claim, regardless of whether a proof of claim therefor was filed, whether
the Claim is an Allowed Claim, or whether the holder thereof votes to accept the
Plan.
ARTICLE IV.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. Rejected Contracts and Leases
Except as otherwise provided in the Plan, or in any contract, instrument,
release or other agreement or document entered into in connection with the Plan,
each of the executory contracts and unexpired leases to which the Debtor is a
party, to the extent such contracts or leases are executory contracts or
unexpired leases, will be rejected by the Debtor on the Confirmation Date,
unless such contract or lease (i) previously (a) has been assumed, rejected, or
terminated by the Debtor (including, but not limited to, the Calabrian License
Agreement) or (b) shall have expired or terminated pursuant to its own terms or
(ii) is listed on the schedule of assumed contracts and leases annexed to the
Plan as Exhibit 1; provided, however, that neither the inclusion by the Debtor
of a contract or lease on Exhibit 1 to the Plan nor anything contained in the
Plan or the Disclosure Statement constitutes an admission by the Debtor that
such contract or lease is an executory contract or unexpired lease or that the
Debtor or its successors and assigns have any
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<PAGE>
liability thereunder. The Confirmation Order will constitute an order of the
Bankruptcy Court approving the rejections described herein, pursuant to section
365 of the Bankruptcy Code, as of the Confirmation Date.
B. Bar to Rejection Damages
If the rejection of an executory contract or unexpired lease pursuant to
Article IV.A above gives rise to a Claim by the other party or parties to such
contract or lease, such Claim shall be forever barred and shall not be
enforceable against the Debtor, its Estate, or Reorganized Noxso, unless a proof
of claim is filed and served on Reorganized Noxso and counsel for Reorganized
Noxso within 40 days after service of entry of the Confirmation Order or such
other date as prescribed by the Bankruptcy Court.
C. Assumed Contracts and Leases
Except as otherwise provided in the Plan, or in any contract, instrument,
release, or other agreement or document entered into in connection with the
Plan, the Debtor shall assume each of the executory contracts and unexpired
leases listed on Exhibit 1 hereto. Any monetary amounts by which each executory
contract and unexpired lease to be assumed under the Plan may be in default
shall be satisfied, under section 365(b)(1) of the Bankruptcy Code, by cure
payments to be made on the Distribution Date. In the event of a dispute
regarding (i) the nature or amount of any cure payments, (ii) the ability of the
Debtor or its assignee to provide "adequate assurance of future performance"
(within the meaning of section 365 of the Bankruptcy Code) under the contract or
lease to be assumed, or (iii) any other matter pertaining to assumption or
assignment, the Debtor or Reorganized Noxso shall make such cure payments
following the entry of a Final Order resolving the dispute and approving the
assumption. The Confirmation Order shall constitute an order of the Bankruptcy
Court approving the assumptions described in this Article, pursuant to section
365 of the Bankruptcy Code, as of the Confirmation Date.
15
<PAGE>
ARTICLE V.
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT AND UNLIQUIDATED CLAIMS
A. Objection Deadline; Prosecution of Objections
The Debtor or Reorganized Noxso, as the case may be, will be allowed up to
120 days after the Consummation Date (unless extended by an order of the
Bankruptcy Court) to file objections to Claims with the Bankruptcy Court and
serve such objections upon the holders of each of the Claims to which objections
are made. Nothing contained in the Plan, however, will limit Reorganized Noxso's
right to object to Claims, if any, filed or amended more than 120 days after the
Consummation Date. Reorganized Noxso will be authorized to resolve all Disputed
Claims by withdrawing or settling such objections thereto, or by litigating to
judgment the validity, nature, and/or amount thereof in the Bankruptcy Court or
such other court having jurisdiction.
Further, pursuant to section 1123(b)(3) of the Bankruptcy Code, the Debtor
shall retain and may enforce claims held by it or its estate, including but not
limited to any action for recovery of a voidable transfer pursuant to ss.ss.
544, 545, 547, 548, 549, 550, or 553(b) of the Bankruptcy Code. The Creditors'
Committee shall retain the right to seek an order of the Bankruptcy Court
compelling the Debtor, or granting the Creditors' Committee the right, to bring
such action(s) should the Debtor refuse to bring such action(s).
B. No Distributions Pending Allowance
Notwithstanding any other provision of the Plan, no payments or
distributions shall be made with respect to all or any portion of a Disputed
Claim unless and until all objections to such Disputed Claim have been settled
or withdrawn or have been determined by Final Order, and the Disputed Claim, or
some portion thereof, has become an Allowed Claim.
C. Disputed Claims Reserve
Funds attributable to Disputed Claims on the Distribution Date will be held
in the Disputed Claims Reserve and any funds remaining in the Disputed Claims
Reserve on the Secondary Distribution Date should be paid on a pro-rata basis to
members of the specific Class.
D. Claims under $10,000
If the face amount of a Disputed Claim is less than $10,000, Reorganized
Noxso may settle the Disputed Claim without notice to any party. If the face
amount of the Disputed Claim is more than $10,000, Reorganized Noxso must give
notice of the proposed settlement to the Creditors' Committee. If the Creditors'
Committee objects to the proposed settlement of such a Disputed
16
<PAGE>
Claim and does not withdraw its objection, then Reorganized Noxso must obtain
Bankruptcy Court approval of the proposed settlement.
ARTICLE VI.
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
The Bankruptcy Court may confirm the Plan only if it determines that the
Plan complies with the technical requirements of chapter 11, including, among
other things, that:
(a) the Plan has properly classified Claims and Interests;
(b) the Plan complies with applicable provisions of the Bankruptcy Code;
(c) the Debtor has complied with applicable provisions of the Bankruptcy
Code;
(d) the Debtor has proposed the Plan in good faith and not by any means
forbidden by law;
(e) disclosure of "adequate information" as required by section 1125 of
the Bankruptcy Code has been made;
(f) the Plan has been accepted by the requisite votes of all classes of
creditors (except to the extent that "cramdown" is available in an
Impaired Class);
(g) the Plan is in the "best interests" of all holders of Claims or
Interests in an Impaired Class; and
(h) all fees and expenses payable under 28 U.S.C. ss. 1930, as determined
by the Bankruptcy Court at the Confirmation Hearing, have been paid or
the Plan provides for the payment of such fees on the Consummation
Date.
Consummation of the Plan is subject to the following conditions precedent:
(a) an agreement between the Debtor and a third party providing for
funding of the New Equity (the "New Equity Funding");
(b) the Amendment to the Cooperative Agreement;
(c) receipt by the Debtor of the Available Cash;
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(d) approval by the Bankruptcy Court of the Host Site Agreement; and
(e) the Confirmation Order shall become a Final Order.
ARTICLE VII.
MODIFICATIONS AND AMENDMENTS
The Debtor may alter, amend, or modify the Plan or any Exhibits thereto
under section 1127(a) of the Bankruptcy Code at any time prior to the
Confirmation Date. After the Confirmation Date and prior to substantial
consummation of the Plan as defined in section 1101(2) of the Bankruptcy Code,
the Debtor may, under section 1127(b) of the Bankruptcy Code, institute
proceedings in the Bankruptcy Court to remedy any defect or omission or
reconcile any inconsistencies in the Plan, the Disclosure Statement approved
with respect to the Plan, or the Confirmation Order, and such matters as may be
necessary to carry out the purpose and effect of the Plan so long as such
proceedings do not adversely affect the treatment of holders of Claims or
Interests under the Plan; provided, however, that prior notice of such
proceedings shall be served in accordance with the Federal Rules of Bankruptcy
Procedure or order of the Bankruptcy Court.
ARTICLE VIII.
RETENTION OF JURISDICTION
Under sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding
entry of the Confirmation Order and occurrence of the Consummation Date, the
Bankruptcy Court will retain exclusive jurisdiction over all matters arising out
of, and related to, the Case and the Plan to the fullest extent permitted by
law, including, among other things, jurisdiction to:
A. Allow, disallow, determine, liquidate, classify, estimate or establish
the priority or secured or unsecured status of any Claim or Interest, including
the resolution of any request for payment of any Administrative Claim and the
resolution of any objections to the allowance or priority of Claims or
Interests;
B. Hear and determine all applications for compensation and reimbursement
of expenses of Professionals under the Plan or under sections 330, 331, 503(b),
1103 and 1129(a)(4) of the Bankruptcy Code; provided, however, that, from and
after the Consummation Date the payment of the fees and expenses of the retained
professionals of Reorganized Noxso shall be made in the ordinary course of
business and shall not be subject to the approval of the Bankruptcy Court;
C. Hear and determine all matters with respect to the assumption or
rejection of any executory contract or unexpired lease to which the Debtor is a
party or with respect to which a
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Debtor may be liable, including, if necessary, the liquidation or allowance of
any Claims arising therefrom;
D. Effectuate performance of and payments under the provisions of the Plan;
E. Determine any and all pending adversary proceedings, motions,
applications, and contested or litigated matters;
F. Enter such orders as may be necessary or appropriate to execute,
implement, or consummate the provisions of the Plan and all contracts,
instruments, releases, and other agreements or documents created in connection
with the Plan, the Disclosure Statement or the Confirmation Order;
G. Hear and determine disputes arising in connection with the
interpretation, implementation, consummation, or enforcement of the Plan,
including disputes arising under agreements, documents or instruments executed
in connection with the Plan;
H. Consider any modifications of the Plan, cure any defect or omission, or
reconcile any inconsistency in any order of the Bankruptcy Court, including,
without limitation, the Confirmation Order;
I. Issue injunctions, enter and implement other orders, or take such other
actions as may be necessary or appropriate to restrain interference by any
entity with implementation, consummation, or enforcement of the plan or the
Confirmation Order;
J. Enter and implement such orders as may be necessary or appropriate if
the Confirmation Order is for any reason reversed, stayed, revoked, modified, or
vacated;
K. Hear and determine any matters arising in connection with or relating to
the Plan, the Disclosure Statement, the Confirmation Order or any contract,
instrument, release, or other agreement or document created in connection with
the Plan, the Disclosure Statement or the Confirmation Order;
L. Enforce all orders, judgments, injunctions, releases, indemnifications,
and rulings entered in connection with the Case;
M. Hear and determine such other matters as may be provided in the
Confirmation Order or as may be authorized under provisions of the Bankruptcy
Code; and
N. Enter final decrees closing the Case.
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ARTICLE IX.
EFFECTS OF CONFIRMATION
A. Binding Effect
The Plan shall be binding upon and inure to the benefit of the Debtor, all
present and former holders of Claims and Interests, and their respective
successors and assigns, including, but not limited to, Reorganized Noxso.
B. Waiver of Claims; Covenant Not to Sue
The distributions provided for in the Plan (if any) are in full
satisfaction and payment of all Claims against and Interests in the Estate.
Effective as of the Confirmation Date, but subject to the occurrence of the
Consummation Date, and except as otherwise provided in the Plan or the
Confirmation Order, (i) all Persons who have held, hold, or may hold Claims
against or Interests in the Debtor and (ii) the Debtor shall be deemed to have
forever waived and covenanted with the Estate and the Debtor's officers and
directors (collectively, the "Released Parties"), to waive and not to (i) sue,
or otherwise seek any recovery from the Released Parties or their property,
whether for tort, fraud, contract, violations of federal or state securities
laws, or otherwise, based upon any act or occurrence or failure to act taken or
occurring before the Consummation Date arising out of the business or affairs of
the Debtor, or (ii) assert against any of the Released Parties or their property
any Claim, obligation, right, cause of action or liability which any such holder
of a Claim against or Interest in the Debtor may be entitled to assert, whether
known or unknown, foreseen or unforeseen, existing or hereafter arising, based
in whole or in part upon any act or omission, transactions, or occurrence taking
place on or before the Consummation Date in any way relating to the Debtor, the
Case, or the Plan.
C. Exculpation and Limitation of Liability
Neither the Debtor nor the Creditors' Committee, nor any of their
respective present or former members, officers, directors, employees, advisors,
attorneys, or agents, will have or incur any liability to any holder of a Claim
or an Interest, or any other party in interest, or any of their respective
agents, employees, representatives, financial advisors, attorneys, or
affiliates, or any of their successors or assigns, for any act or omission in
connection with, relating to, or arising out of, the Case, the pursuit of
confirmation of the Plan, the Consummation of the Plan, or the administration of
the Plan or the property to be distributed under the Plan, except for their
willful misconduct or gross negligence, and in all respects shall be entitled to
reasonably rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan.
Notwithstanding any other provision of the Plan, no holder of a Claim or
Interest, no other party in interest, none of their respective agents,
employees, representatives, financial advisors, attorneys, or affiliates, and no
successors or assigns of the foregoing, will have any right of action
20
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against the Debtor, the Estate, Reorganized Noxso, the Creditors' Committee, or
any of their respective present or former members, officers, directors,
employees, advisors, attorneys, or agents, for any act or omission in connection
with, relating to, or arising out of, the Case, the pursuit of Confirmation of
the Plan, the Consummation of the Plan, or the administration of the Plan or the
property to be distributed under the Plan, except for their willful misconduct
or gross negligence.
ARTICLE X.
COMPROMISES AND SETTLEMENTS
Pursuant to Fed.R.Bankr.P. 9019(a), the Debtor may compromise and settle
various Claims (a) against it and (b) that it has against other Persons. The
Debtor expressly reserves the right (with Bankruptcy Court approval, following
appropriate notice and opportunity for a hearing) to compromise and settle
Claims against them and Claims that they may have against other Persons up to
and including the Consummation Date. After the Consummation Date, such right
shall pass to Reorganized Noxso, pursuant to Article III.A of the Plan.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
A. Bar Dates for Certain Claims
1. Administrative Claims
The Confirmation Order will establish an Administrative Claims Bar Date for
filing Administrative Claims (except for Professional Fees and the expenses of
the members of the Creditors' Committee), which date will be 45 days after the
Confirmation Date. Holders of asserted Administrative Claims, except for
Professional Fees and the expenses of the members of the Creditors' Committee,
not paid prior to the Confirmation Date must submit proofs of Claim on or before
such Administrative Claims Bar Date or be forever barred from doing so. The
notice of Confirmation to be delivered pursuant to Fed.R.Bankr.P. 3020(c) and
2002(f) will set forth such date and constitute notice of this Administrative
Claims Bar Date. The Debtor, or Reorganized Noxso, as the case may be, will have
45 days (or such longer period as the Bankruptcy Court may allow) after the date
on which the applicable application for compensation or reimbursement was served
to review and object to such Administrative Claims before a hearing for
determination of allowance of such Administrative Claims.
2. Professional Fee Claims; Substantial Contribution Claims
All parties requesting compensation or reimbursement of Professional Fees
pursuant to sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code
for services rendered to the
21
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Debtor prior to the Consummation Date (including requests under section
503(b)(4) of the Bankruptcy Code by any Professional or other entity for making
a substantial contribution in the Case) must file and serve on the Debtor and
counsel for the Debtor an application for final allowance of compensation and
reimbursement of expenses no later than 45 days after the Consummation Date,
unless otherwise ordered by the Bankruptcy Court. Objections to applications of
such Professionals or other entities for compensation or reimbursement of
expenses must be filed and served on the Debtor, counsel for the Debtor, and the
requesting Professional or other entity no later than 45 days (or such longer
period as the Bankruptcy Court may allow) after the date on which the applicable
application for compensation or reimbursement was served.
B. Revocation, Withdrawal or Non-Consummation
The Debtor reserves the right to revoke or withdraw the Plan prior to the
Confirmation Date and to file subsequent plans of reorganization. If the Debtor
revokes or withdraws the Plan, or if Confirmation or Consummation does not
occur, then (a) the Plan shall be null and void in all respects, (b) any
settlement or compromise embodied in the Plan (including the fixing or limiting
to an amount certain any Claim or Class of Claims), assumption or rejection of
executory contracts or leases affected by the Plan, and any document or
agreement executed pursuant to the Plan, shall be deemed null and void, and (c)
nothing contained in the Plan shall (i) constitute a waiver or release of any
Claims by or against, or any Interests in, the Debtor or any other Person, (ii)
prejudice in any manner the rights of the Debtor or any other Person, or (iii)
constitute an admission of any sort by the Debtor or any other Person.
C. Severability of Plan Provisions
If, prior to Confirmation, any term or provision of the Plan is held by the
Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court, at
the request of the Debtor, shall have the power to alter and interpret such term
or provision to make it valid or enforceable to the maximum extent practicable,
consistent with the original purpose of the term or provision held to be
invalid, void or unenforceable, and such term or provision shall then be
applicable as altered or interpreted. Notwithstanding any such holding,
alteration or interpretation, the remainder of the terms and provisions of the
Plan shall remain in full force and effect and shall in no way be affected,
impaired or invalidated by such holding, alteration or interpretation. The
Confirmation Order shall constitute a judicial determination and shall provide
that each term and provision of the Plan, as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable pursuant
to its terms.
D. Successors and Assigns
The rights, benefits and obligations of any entity named or referred to in
the Plan shall be binding on, and shall inure to the benefit of, any heir,
executor, administrator, successor or assign of such entity.
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E. Service of Documents
1. Any pleading, notice or other document required or permitted to be
provided to the Debtor under the Plan shall be in writing and served by (a)
certified mail, return receipt requested, (b) hand delivery, or (c) overnight
delivery service, to be addressed as follows:
DOEPKEN KEEVICAN & WEISS
58th Floor, USX Tower
600 Grant St.
Pittsburgh, PA 15219
Attn: Philip J. Uher
-and-
WEEMS AND HOUSE
Attn: Kyle R. Weems
1810 McCallie Avenue
Chattanooga, TN 37404
ARTICLE XII. APPLICABILITY OF FEDERAL AND OTHER SECURITIES LAWS
No registration statement will be filed under the Securities Act or any
state securities laws with respect to the offer and distribution under the Plan
of the New Equity, the Remaining Equity, and the New Options. The Debtor
believes that the provisions of section 1145 of the Bankruptcy Code exempt the
offer and distribution of such securities under the Plan from federal and state
securities registration requirements.
EACH RECIPIENT OF NEW EQUITY, REMAINING EQUITY OR NEW OPTIONS WHO BELIEVES
THAT IT MAY QUALIFY AS AN UNDERWRITER UNDER SECTION 1145(b) OF THE BANKRUPTCY
CODE SHOULD CONSULT ITS OWN COUNSEL FOR GUIDANCE ON THESE MATTERS.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY].
23
<PAGE>
Dated: Pittsburgh, Pennsylvania
June 15, 1998
NOXSO CORPORATION,
Debtor-in-Possession
By: /s/ Edwin J. Kilpela
----------------------------------
Name: Edwin J. Kilpela
Title: President and Chief Executive
Officer of Noxso Corporation
DOEPKEN KEEVICAN & WEISS
Attorneys for NOXSO Corporation,
Debtor-in-Possession
By: /s/ Joel M. Walker,
- ------------------------------
Joel M. Walker, Esquire
PA Id No. 26515
Philip J. Uher, Esquire
PA Id. No. 63235
58th Floor, USX Tower
Pittsburgh, PA 15219
(412) 355-2600
and
Kyle R. Weems, Esquire
TN Id. No. 1010
Weems & House
1810 McCallie Avenue
Chattanooga, TN 37404
(423) 624-1000
24
<PAGE>
EXHIBIT 1- ASSUMED EXECUTORY CONTRACTS AND LEASES
1. Nonresidential Real Property Lease by and between Noxso Corporation and
John Vangura, Vangura Tool, P.O. Box 300, Clairton, PA 15025.
2. License Agreement for Noxso Process for part of Europe by and between Noxso
Corporation and FLS miljo a/s, Ramsingsvej 30, DK-2500 Valby, Copenhagen,
Denmark
25
<PAGE>
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF TENNESSEE
AT CHATTANOOGA
- ------------------------------
)
In Re: )
)
NOXSO CORPORATION, ) Chapter 11
) Case No. 97-10709
Debtor ) Judge R. Thomas Stinnett
- ------------------------------)
MODIFICATION OF FIRST AMENDED PLAN OF NOXSO CORPORATION
1. On July 22, 1998, this Court entered its Order approving the Debtor's First
Amended Disclosure Statement (the "Approval Order").
2. Pursuant to the Approval Order, this Court set August 24, 1998 as the
deadline for objections to the confirmation of the First Amended Plan of
Reorganization of Noxso Corporation (the "Plan").
3. The Office of the United States Trustee (the "U.S. Trustee") has filed an
objection (the "Objection") to the confirmation of the Plan. In its
objection, the U.S. Trustee has requested that certain language of the Plan
be deleted.
4. After discussions between counsel for the Debtor and the U.S. Trustee, the
parties have agreed that the U.S. Trustee's objection can be resolved by a
minor modification to the Plan.
5. Pursuant to the modification, the last sentence of the first paragraph of
Article IV.E shall now read as follows: "Upon the Confirmation Date, the
Debtor may operate its business free of any restrictions of the Bankruptcy
Code, the Bankruptcy Court or the United States Trustee, subject to the
provisions of Article VIII and the duty to pay quarterly fees and file
monthly reports as described below."
NOXSO CORPORATION,
Debtor-in-Possesion
By: /s/ Edwin J. Kilpela
-----------------------------
Name: Edwin J. Kilpela
Title: President and Chief Executive
Officer of Noxso Corporation
26
<PAGE>
/s/ Joel M. Walker
---------------------------
Joel M. Walker, Esquire
PA Id No. 26515
Philip J. Uher, Esquire
PA Id. No. 63235
DOEPKEN KEEVICAN & WEISS
58th Floor, USX Tower
Pittsburgh, PA 15219
(412) 355-2600
and
Kyle R. Weems, Esquire
TN Id. No. 1010
WEEMS & HOUSE
1810 McCallie Avenue
Chattanooga, TN 37404
(423) 624-1000
Attorneys for NOXSO Corporation,
Debtor-in-Possession
27
